Question

Which statement does NOT accurately describe accelerated benefits?

A. Accelerated benefits are added as a rider to some policies, but built into others as a provision.
B. Accelerated benefits are treated as a policy loan.
C. Accelerated benefits pay a portion of the death benefit prior to death of the insured.
D. Accelerated benefits reduce the amount payable to the beneficiary.

Answer 1

Accelerated benefits allow policyholders to receive a portion of the death benefit while they are still alive, usually in the case of a terminal illness. These benefits do not reduce the amount payable to the beneficiary.

Step-by-step explanation:

The statement that does NOT accurately describe accelerated benefits is D. Accelerated benefits reduce the amount payable to the beneficiary.

Accelerated benefits are a provision in certain life insurance policies that allow policyholders to receive a portion of the death benefit while they are still alive, usually in the case of a terminal illness. These benefits are designed to provide financial support during a time of need, such as paying for medical expenses or ongoing care.

However, accelerated benefits do not reduce the amount payable to the beneficiary. The remaining death benefit will still be paid out to the beneficiary upon the policyholder's death, minus any accelerated benefits already received. Therefore, the correct statement would be that accelerated benefits do not reduce the total amount of the death benefit, but rather allow for early access to a portion of it.